Ichigo Office(8975)

Ichigo Office October 2019 Fiscal Period
Corporate Presentation
December 13, 2019

Ichigo Office REIT Investment Corporation (8975)
Ichigo Investment Advisors Co., Ltd.

© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

www.ichigo-office.co.jp/english

Make The World
More Sustainable© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

October 2019 Results

Ichigo Office ESG

 October 2019 Highlights
 October 2019 Earnings
 October 2019 Financial Metrics
 Strong Record of Sustainable & Enduring Dividend Growth Growing Shareholder Value: Continued Growth in Base EPS
 Growing Shareholder Value: Continued Growth in NAV
 Sustained High Office Occupancy: 99.3%
 Organic Growth: Driving Rental Growth Organic Growth: Existing Tenants at Higher Rents
 Organic Growth: New Tenants at Higher Rents
 Acquisition-Driven Growth: October 2019 Acquisitions
 Launch of Ichigo J.League Shareholder Program Ichigo Office’s Sustainability Commitment
 Environmental
 Social
 GovernanceAppendix Financial & Portfolio Data
 About Ichigo Office

Ichigo Office Growth Strategy
 Sustainable Growth to Maximize Shareholder Value Rent Gap Offers Further NOI Upside Value-Add Capex: Ichigo Nogizaka Building Driving Earnings with New Leases: Ebisu Green Glass Driving Higher NOI & Harvesting Gains in Strong Market
 Sustainable Growth via Sponsor Support
 Access to Ichigo’s Robust Pipeline of Office Assets
 April 2020 Forecast
 October 2020 Forecast© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

5

October 2019 Results© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

6

October 2019 Highlights
Achievements
AcquisitionDriven
GrowthOrganic Growth

Financing• Sold 1 retail asset and acquired 1 officeasset (Gains on sale JPY 440M)• Invested in bridge fund (JPY 50M)

Details• Continued strengthening of specialized office
portfolio• Gains on sales exceeding unrealized gains• Robust pipeline supported by sponsor support &third-party bridge funds• Occupancy: 99.4%• Maintaining 99+% occupancy• 46 upward rent renewals (avg +6.6%)• Rent renewals +JPY 4.8M per month• 31 new tenants at higher rents (avg +21.2%) • New tenants +JPY 5.1M per month• Bond Issuance JPY 1.2B
• Refinancing
JPY 6B• 4th Bond Issuance(10-year maturity, 0.89% interest rate)• Hedging interest rate risk (97.7% of loans are
fixed rate; 7.7 year avg maturity on new loans)

Base EPS1

JPY 2,032(+JPY 32, +1.6% vs. April 2019)• Continued Base EPS growth: +JPY 11 vs. initial
forecast of JPY 2,021 (+0.5%)

FFO2

JPY 2,581• FFO growth driving Base EPS & dividend growth

Dividend

JPY 2,150

NAV3

JPY 91,618(+JPY 23, +0.9% vs. April 2019)(-JPY 105, -4.7% vs. April 2019)(+JPY 3,684, +4.2% vs. April 2019)1 Base EPS = EPS – Capital Gains

2 FFO = Funds From Operations• Includes gains on sale of JPY 49 per share (JPY
186 in April 2019 period)• +JPY 10 vs. initial forecast of JPY 2,140 (+0.5%)• Unrealized gains: JPY 39.7B (+5.3B)
3 NAV = BPS + Unrealized Capital Gains© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

7

October 2019 Earnings(JPY million)
April 2019
ActualOctober 2019
Actual (A)October 2019
Forecast (B)vs. Forecast(A) - (B)Operating Revenue

8,451

8,304

8,266

+37

Operating Profit

4,510

4,363

4,357

+5

Recurring Profit

3,733

3,554

3,537

+17

Net Income

3,732

3,554

3,536

+17

Dividend Reserve (-)

382

364

362

+2

Dividend Reserve Release (+)

105

105

105

–

Dividend

JPY 2,255

JPY 2,150

JPY 2,140+JPY 10EPS

JPY 2,000

JPY 2,032

JPY 2,021+JPY 11

NOI

5,648

5,679

5,640

+39

85

85

85

–

Occupancy (on Last Day of Period)

99.3%

99.4%

98.3%

+1.1%

Average Occupancy

99.3%

99.3%

99.0%

+0.3%

No. of Assets

Major Variation Factors (vs. October 2019 Forecast)
Increase in Rental Income +36
Increase in common area services income +36(Ichigo Motoazabu Building +9)(Ichigo Ikejiri Building +4)(Ichigo Omori Building +4)
Increase in Rental Expenses +0
Increase in service provider expenses (mainly brokerage fee) +17
Increase in property tax +12
Increase in other income +3
Decrease in utilities expenses -32
Increase in Operating Expenses (excluding Rental Expenses) +31
Increase in performance fee to asset manager +40
Decrease in other expenses through cost reduction -9
Increase in Non-Operating Revenue +4
Increase in insurance payment income +3
Decrease in Non-Operating Expenses -8
Decrease in interest expenses (including bond interest) -2
Decrease in up-front loan fees & related expenses -5
Reference: Capex
October 2019 Actual 478
Reference: October 2019 Reserves (Post-Dividend)
Negative Goodwill Reserve 9,424
Dividend Reserve 3,002* NOI = Rental Income - Rental Expenses + Depreciation
No. of Assets is Period-End© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

8

October 2019 Financial Metrics
Lengthening Debt Maturities & Increasing Fixed-Rate Loans (Now 98%)
October 2018

April 2019

October 2019

FFO (per Share)

JPY 2,489

JPY 2,558

JPY 2,581

Dividend

JPY 2,014

JPY 2,255

JPY 2,150

NAV (per Share)

JPY 85,957

JPY 87,934

JPY 91,618

LTV

47.6%

48.1%

48.0%

Average Interest Rate

1.02%

1.00%

0.99%

Average Debt Maturity

6.0 years

6.2 years

6.4 years% Fixed Rate Loans

94.0%

96.9%

97.7%

* FFO = Net Income + Depreciation + Loss on Disposal of Fixed Assets + Liability for Asset Retirement Obligation + Loss on Asset Sale Gain on Asset Sale - Extraordinary Gain + Extraordinary Loss
LTV = Interest-Bearing Liabilities/Total Assets
Average Debt Maturity is Period-End© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

9

Strong Record of Sustainable & Enduring Dividend Growth(JPY)

18 Consecutive Periods of Dividend Growth(Apr 2010 to Apr 2019,+13.2% CAGR)

2,255
2,014
1,904 1,923 1,930 1,964

1,387

1,603
1,494 1,537 1,541 1,547

2,150 2,122 2,151

1,706 1,740

1,219
899*
899*

979* 1,031*

737*
737*

April
2010

October
2010

April October April October
2011
2011 2012 2012

April October
2013
2013

April October April October
2014
2014
2015
2015

April October
2016 2016

April October
2017 2017

April October April October
2018
2018
2019 2019

April
2020

October
2020

Forecast* April 2010 to October 2011 dividends adjusted to reflect stock split on November 1, 2011; CAGR = Compound Annual Growth Rate
© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

10Growing Shareholder Value: Continued Growth in Base EPS
October 2019 Dividend +JPY 49 on Gains on Sale (+JPY 186 in April 2019)

Gains on Sale
Release from Dividend Reserve and Negative Goodwill Reserve
Base EPS

Dividend

1,930

1,964

106

107

1,824

October 2017

1,857(+1.8%)

April 2018

2,014
69

1,945

(JPY)

2,255

2,150

186

49

2,122

2,151

69

69

69

69

2,000

2,032

2,053

2,082

(+4.7%)(+2.8%)(+1.6%)(+1.0%)(+1.4%)

October 2018

April 2019

October 2019

April 2020
(Forecast)

October 2020
(Forecast)Base EPS = EPS – Capital Gains© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

11

Growing Shareholder Value: Continued Growth in NAV
Growing Value via Value-Add Capex & Pro-Active Acquisitions/Sales(JPY)

NAV per share+45.1%
Became Specialized Office REIT
in September 2015

70,11773,49376,40078,336

October
2016

April
2017

81,15584,07685,957April
2018

October
2018

87,934

91,61863,140

April
2015

October
2015

April
2016

October2017© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

April
2019

October
201912

Sustained High Office Occupancy: 99.3%
High Occupancy & Rising Rents
Occupancy (Office)

Average Rent per Tsubo (3.3m2)
Office (All)

100%
98.9%

99.3%

99.1%

98.2%

98.9%

98.5%
97.4%

97.2%

99.3%
99.1%

95%

90%
April 2018

16,80016,90016,90017,200Occupancy
Free Rent-Adjusted Occupancy

October 2017

(JPY)

Office (Central Tokyo)

October 2018

Average Free-Rent Period:
October 2019 0.7 months
April 2019
0.9 months

April 2019

October 201914,200

Oct 2017
All Offices
74 Assets(Central Tokyo) (42 Assets)

14,200

Apr 2018
74 Assets(42 Assets)

14,500

Oct 2018
77 Assets(44 Assets)

14,600

Apr 2019
79 Assets(45 Assets)

17,30014,700

Oct 2019
80 Assets(45 Assets)

Occupancy is Period-End© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

13

Organic Growth: Driving Rental Growth
New Tenants/
Increased Space

Departing Tenants/
Decreased Space

Renewals at
Higher Rent

+32

-27

+4.8

Change due toTenant Movements+JPY 4M (+0.4%)(JPY million)

Change due to
Lease Renewals+JPY 4.8M (+0.5%)

1,081
1,072
+1.7% p.a.

April 2019

Monthly Rent

October 2019

Change in Occupancy:
99.3% (April 2019)  99.4%* (October 2019)* Change in Occupancy is like-for-like and thus excludes newly acquired or sold assets© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

14

Organic Growth: Existing Tenants at Higher Rents+6.6% Average Increase at Renewal, +JPY 4.8M Monthly Increase in Rents
New Rent vs. Previous Rent

Change in Total Rents(Office, Leased Area Basis)(Office)■ Downward■ Flat0.2%

0.1%(Monthly rent, JPY thousand)UpwardDownward■ Upward
0%0%
Downward:
None+7,024
7,024+4,873

66.4%

70.2%

67.6%
Flat: 160 tenants

82.8%

Rent
+4,056
Change

4,075

4,873
+2,826
2,838

33.3%
Averageincrease:+5.5%

Apr 2018

Averageincrease:
+7.4%

29.8%

32.4%

17.1%

Averageincrease:+8.5%

Averageincrease:+6.6%

Oct 2018

Apr 2019

Oct 2019

Upward:46 tenants

2,683

-18

-11

0

0

0

Apr 2018

Oct 2018

Apr 2019

Oct 2019

Apr 2020* Apr 2020 reflects leases in place as of November 15, 2019.

© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

15

Organic Growth: New Tenants at Higher Rents
85% of New Tenants at Higher Rents+21.2% Average Increase from New Tenants, +JPY 5.1M Monthly Increase
New Tenant Rent vs. Previous Tenant Rent

Impact on Rental Income from Tenant Turnover (Office)(Office, Leased Area Basis)■ Downward

28.5%■ Flat(Monthly rent, JPY thousand)■ Upward

13.6%

12.1%

0%

0%

2.3%
8.5%

+8,920

Downward:
1 new tenant
Decrease:-12.8%
Flat: 4 new tenants

UpwardDownward

9,500
Rent
Change +4,955

6,793+5,183

4.1%+3,750

86.4%

87.9%

89.2%

Upward:31 new tenants

5,235

3,876
2,383

67.3%
Averageincrease:+18.9%

Averageincrease:+30.4%

Averageincrease:+20.8%

Averageincrease:+21.2%

-579

-125

-52

0

Oct 2018

Apr 2019

Oct 2019

Apr 2020-1,838Apr 2018

Oct 2018

Apr 2019

Oct 2019

Apr 2018* Apr 2020 reflects leases in place as of November 15, 2019.
© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

16

Acquisition-Driven Growth: October 2019 Acquisitions
Acquired 1 Office in Fukuoka & Acquired Preferential Negotiation Rights for an
Office in Tokyo via Acquisition of TK Equity Interest
TK Overview
Ichigo Hakata East Building

Asset

TK Operator

Tachikawa Holdings GK

Total
TK Investment
AmountJPY 1,150M(Ichigo Office Investment JPY 50M)

Asset Name

Tachikawa Holdings GK TK Equity Interest(Unizo Tachikawa Building)

Underlying Real Estate (Unizo Tachikawa Building)
Area

Tachikawa, Tokyo

Location

8-min walk from Tachikawa Station on
JR Chuo Line and 7-min walkfrom Tachikawa Kita Station on
Tama Toshi Monorail Line

Acquisition Date

May 31, 2019

SellerSponsor (Ichigo)

Area

Hakata-ku, Fukuoka

Location

4-min walk from Hakata Station on JR Linesand Fukuoka City Subway Kuko Line

Investment
RationaleMid-size office located in Fukuoka’s maincommercial district

Acquisition Price

JPY 2,250M

Acquisition Price

JPY 3,830M

Appraisal Value

JPY 2,480M

Exercise Period

May 16, 2021

NOI Yield

5.2%

Appraisal Value

JPY 3,930M

Rationale© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

Mid-size officelocated in Tachikawa,a business and retailcenter in Tokyo17

Launch of Ichigo J.League Shareholder Program
Represents Two Firsts for a Shareholder Program in Japan− Ichigo is the first Japanese company to include not just its own shareholders, butalso the shareholders of the REITs and YieldCo that it manages, in its
shareholder program− Ichigo is the first company to offer shareholders free tickets to every J.League
game at every J.League club (55 clubs in total)

Ichigo is deepening its partnership with the J.League and working tofurther Ichigo’s mission of promoting local community developments.

Ichigo J.League Shareholder
Program Website Landing Page
© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

18

Ichigo Office Growth Strategy© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

19

Sustainable Growth to Maximize Shareholder Value
2019/42022/4

Goal

Sustainable Growth to Maximize Shareholder Value
Build Robust Portfolio & Drive Sustainable Growth
Organic Growth• Provide differentiated Ichigo Layout Office and Ichigo Lounge
high-quality office spaces• Increase asset value & investment returns via value-add capex• Maintain & drive earnings growth with a focus on tenant satisfaction• Support tenant growth via tenant networking and business matching• Minimize downtime at re-tenanting and free-rent periods

Acquisition-Driven Growth

Action Plans• Pursue acquisition-driven growth opportunities via bridge funds & sponsor support• Build a durable growth model via asset acquisitions/sales & full-scale, value-add
asset renovations➡ Leverage Ichigo’s market-leading value-add capabilities

Finance & IR
• Diversify funding (accretive equity financing, green bonds, retail bonds, etc.)• Raise credit rating & enter global REIT indices

April 2022 Targets
Base EPS
JPY 2,000 ➡ JPY 2,200(+10.0%)

Dividend
JPY 2,069 ➡ JPY 2,269(+9.7%)

Credit Rating
A
A+➡
(Stable) (Stable)➡ Selected for Inclusion in FTSE EPRA Nareit Global Real Estate Index• Further improve borrowing terms

Global REIT Indices*

ESG• Acquire environmental certifications and achieve energy reduction goals• Promote wheelchair access, etc. barrier-free design at assets• Maintain and strengthen best-in-class J-REIT governance© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

Index Entry*Target only if >JPY 250B in AUM

20

Organic Growth Strategy

Rent Gap Offers Further NOI Upside
Rent Gap = When Existing Tenant Rents Don’t Rise as Fast as Market Rents
Can Renegotiate Below-Market Leases to Close Gap
Difference at Time of Lease Renewal (Before Renegotiation)

Difference Between Tenant Rent and Market Rent
(Office, By Leased Area)■ >10%■ -10% to 0%

5%

All areas

Central Tokyo■ 0% to 10%■ Below -10%
254 (27.6%)
16232 (25.3%)
1.48%

14

1.48%

0.50%

0.38%

39

-0.34%-0.12%

0.40%-1.07%-0.43%-2.35%

51-2.15%

61-5%-6.74%-6.20%-8.84%-9.13%

-10%

April
2016

October
2016

April
2017

61

29

0.21%

October
2017

April
2018

October
2018

April
2019

October
2019

Below-Market Rent Tenants0%

206 (22.4%)
13128

Apr 2020© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

(JPY million)

226 (24.6%)
36
43

66
53

102

109

Oct 2020

Apr 2021

93

Oct 2021~

21

Organic Growth

Value-Add Capex: Ichigo Nogizaka Building
Fast Value-Add Capex at Newly Acquired Building– Increase tenant satisfaction via high-quality shared work space designed to help
tenants communicate and collaborate• Renovated vacant floor in Phase 1 (5th floor common area and office space)• Will renovate first floor entrance and façade in Phase 2 (To be completed in Feb 2020)

Outcomes
Capex

Phase 1 JPY 28M
Phase 2 JPY 29M
Total
JPY 58MNOI+JPY 15M

ROI

26.5%

Ichigo Nogizaka Building

Extensive Natural Light and Greenery

Open Office Layout

Entrance

Entrance Hall with Lighting Wall

© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

22

Organic GrowthDriving Earnings with New Leases: Ebisu Green Glass
Driving Earnings at Tenant Replacements, Taking Full Advantage ofPrime Central Tokyo Location
April 2020 Fiscal Period Leasing Plan
• Tenant occupying 3-9 floors (2,245m2) will move out in March 2020
• Ichigo Office began leasing immediately after receiving termination notice.
• High tenant demand due to prime Shibuya/Ebisu location• Minimal downtime and free-rent period will support high NOI generation

Leasing Plan

Ebisu Green Glass© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

New TenantMove-Ins

6th - 9th Fl: Apr 2020
4th - 5th Fl: May 2020
1 3rd Fl: Jun 2020

Rental Income+21.0%NOI+JPY 43M**Based on Base EPS

23

Driving Higher NOI & Harvesting Gains in Strong Market
Acquisitions & Sales Over Past Three Years
April 2017 & October 2017

April 2018 & October 2018

• 4 assets

Sales(10 assets)

Acquisitions• 3 retail assets• Sale price JPY 6B(serviced apartments andretail assets)• Sale price JPY 4.4B
(Gains on sales JPY 30M)

April 2019
• 2 retail assets• Sale price JPY 3.6B

(Gains on sales JPY 1.6B)• 3 mid-size office assets• Acquisition price JPY 7B• 3 mid-size office assets• Acquisition price JPY 7.4B

(Gains on sales JPY 650M)• 2 mid-size office assets• Acquisition price JPY 6B

October 2019
• 1 retail asset• Sale price JPY 2.4B

(Gains on sale JPY 440M)• 1 mid-size office asset• Acquisition price JPY 2.3B

(9 assets)

Portfolio Size
+JPY 8.7B(+4.5%)

Outcomes

Office %

203.2

88.1%

+7.4%

NOI Increase
95.5%

JPY 290M per annum* NOI Increase = Forecast NOI ofacquired assets less NOI of soldassets

194.5

Gains on Sales
Dec 31, 2016

Before Acquisitions & Sales

Retail Assets(Oct 31, 2019)

No. of
Retail Assets

Oct 31, 20195

Dec 31, 2016

Oct 31, 2019

Total
Appraisal Value

JPY 10B

Before Acquisitions & Sales© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

+JPY 2.72B

Unrealized
Gains

JPY 1.2B(+13.5%)24

Acquisition-Driven Growth

Sustainable Growth via Sponsor Support
Pursuing Long-Term Sustainable Growth by Leveraging Ichigo’s MarketLeading Value-Add Capabilities
Buy

Sell

Ichigo Office

Ichigo(8975)(TSE1 2337)

ThirdParty
Investors

Buy

Preserve and improve real estateleveraging
Ichigo’s value-add capabilities

Real
EstateValue-Add

Buy/SellAsset Warehousing
Sell

Ichigo Office Sourcing Strengths
・ Sourcing Diversity: Ichigo Office proprietary sourcing routes + Ichigo sponsor network
・ Strong Sponsor Support: Ichigo assets fully available to Ichigo Office for acquisition
・ Stable Sourcing: Backed by Ichigo value-add capabilities, so less sensitive to market environment© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

25

Acquisition-Driven Growth

Access to Ichigo’s Robust Pipeline of Office Assets
Ichigo’s Office Assets: c. JPY 62B (as of August 31, 2019)

Ichigo Hakata Ekimae Square(Fukuoka)

Tradepia Odaiba(Tokyo)Ichigo Kakyoin Building(Sendai)

Kichijoji Central Building(Tokyo)Ichigo Akasaka 317 Building(Tokyo)Ogaku Building(Tokyo)© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

Ichigo Hakata Meiji Dori Building(Fukuoka)

Ichigo Hakata Eki Higashi Building(Fukuoka)26

April 2020 Forecast(JPY million)
October 2019
Actual (B)April 2020
Forecast (A)vs. October 2019(A) - (B)Operating Revenue

8,304

7,836

-467

Operating Profit

4,363

3,956

-406

Recurring Profit

3,554

3,147

-407

Net Income

3,554

3,147

-407

Dividend Reserve (-)

364

–

-364

Dividend Reserve Release (+)

105

105

–

Dividend

JPY 2,150

JPY 2,122-JPY 28

EPS

JPY 2,032

JPY 2,053+JPY 21

NOI

5,679

5,649

-29

85

85

–

Occupancy (on Last Day of Period)

99.4%

98.5%

-0.9%

Average Occupancy

99.3%

99.3%

–

No. of Assets

Major Variation Factors (vs. October 2019)
Decrease in Gains on Sale of Real Estate -440
Decrease in Rental Income -27
Increase due to October 2019 asset acquisition +11
Decrease due to October 2019 asset sale -11[Existing Assets]
Increase in common area services income +25(Ichigo Uchikanda Building +9)(Ichigo Shibuya Udagawacho Building +8(Ichigo Motoazabu Building +6)(Ebisu Green Glass -15)
Decrease in utilities income due to weather fluctuation -42
Decrease in lease termination penalties and restoration & cleaning fee -11
Increase in Rental Expenses -5
Increase due to October 2019 asset acquisition +7
Decrease due to October 2019 asset sale -6[Existing Assets]
Decrease in utilities expenses due to weather fluctuation -24
Increase in maintenance fees +12
Increase in service provider expenses +5
Decrease in Operating Expenses (excluding Rental Expenses) -56
Decrease in October 2019 performance fee to asset manager -39
Decrease in asset sale fee -6
Decrease in non-deductible consumption tax -18
Increase in other operating expenses +7
Decrease in Non-Operating Revenue -3
Decrease in October 2019 insurance payment income -1
Decrease in Non-Operating Expenses -3
Decrease in interest payment (including bond interest) -15
Increase in up-front loan fees & related expenses +12
Reference: Capex
April 2020 Forecast 725* NOI = Rental Income - Rental Expenses + Depreciation
No. of Assets is Period-End

Reference: April 2020 Reserve (Post-Dividend)
Negative Goodwill Reserve 9,319
Dividend Reserve 3,002© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

27

October 2020 Forecast(JPY million)
April 2020
Forecast (B)October 2020
Forecast (A)vs. April 2020(A) - (B)

Major Variation Factors (vs. April 2020)

Operating Revenue

7,836

7,913

+76

Operating Profit

3,956

3,979

+23

Recurring Profit

3,147

3,191

+44

Net Income

3,147

3,191

+44

–

–

–

105

105

–

Dividend Reserve (-)
Dividend Reserve Release (+)
Dividend

JPY 2,122

JPY 2,151+JPY 29

EPS

JPY 2,053

JPY 2,082+JPY 29

NOI

5,649

5,722

+72

85

85

–

Occupancy (on Last Day of Period)

98.5%

98.7%

+0.2%

Average Occupancy

99.3%

99.1%

-0.2%

No. of Assets

Increase in Rental Income +76
Increase in common area services income +25(Ebisu Green Glass +15)
(Ichigo Hongo Building +8)(Ichigo Nogizaka Building +7)(Twicere Yokohama Isogo -16)
Increase in utilities income due to weather fluctuation +45
Increase in lease termination penalties +5
Increase in Rental Expenses +9
Increase in utilities expenses due to weather fluctuation +31
Increase in property tax +12
Decrease in maintenance fees -22
Decrease in service provider expenses -9
Decrease in Operating Expenses (excluding Rental Expenses) +44
Increase in performance fee to asset manager +38
Increase in other operating expenses +5
Decrease in Non-Operating Expenses -21
Decrease in interest expenses (including bond interest) -3
Decrease in up-front loan fees & related expenses -18
Reference: Capex
October 2020 Forecast 589
Reference: October 2020 Reserves (Post-Dividend)
Negative Goodwill Reserve 9,214
Dividend Reserve 3,002* NOI = Rental Income - Rental Expenses + Depreciation
No. of Assets is Period-End© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

28

Ichigo Office ESG© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

29

Ichigo Office ESG

Ichigo Office’s Sustainability Commitment
Ichigo Sustainability Policy
Ichigo believes that working on behalf of society and the environment is a fundamental social responsibility and will support the sustainable growth of
Ichigo and Ichigo Office. Ichigo has thus made sustainability a key priority, and has established the following Sustainability Policy to actively work to
reduce Ichigo’s environmental impact and support sustainable outcomes.
1. Harmony with the Environment
Ichigo actively monitors and minimizes the environmental impact of its real estate operations.
2. Energy Conservation, CO2 Emissions Reduction, and Recycling
Ichigo seeks to contribute to a low-carbon, low-waste society by lowering its energy consumption, extending the useful life of its
assets, actively recycling, and reducing waste and water consumption.
3. Regulatory and Environmental Compliance
Ichigo complies with all environmental laws and regulations and Ichigo’s own independently-established environmental rules. Ichigo
also carefully monitors and complies with all applicable changes in laws and regulations.
4. Training and AwarenessIchigo promotes understanding of its Sustainability Policy and works to increase sustainability awareness among all Ichigo employees.
Ichigo will also promote sustainability in coordination with Ichigo stakeholders, seeking understanding and cooperation onsustainability from Ichigo partner companies and tenants.
5. Sustainability Performance Communication and Disclosure
Ichigo communicates this Sustainability Policy and Ichigo’s sustainability initiatives to society at large. Ichigo also obtains
certifications for its sustainability activities on an ongoing basis.
6. Green Procurement
Ichigo will implement green procurement measures, such as environmentally-sensitive building materials and sustainable design, in
Ichigo’s building renovations, as well as selecting partner companies based on their environmental sustainability initiatives.

Ichigo Sustainability Structure− The Head of Ichigo Office is responsible for promoting sustainability and ensuring compliance with the Sustainability Policy.
− Quarterly meetings to monitor sustainability efforts and compliance Attended by the Heads of Sustainability, Asset Management, and Administration
 Develop sustainability goals and initiatives in coordination with sponsor Ichigo− Training and Awareness Conduct annual sustainability training for Office REIT asset management staff− Information Disclosure Disclose sustainability goals and performance and communicate to stakeholders© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

30

Ichigo Office ESG

Environmental
GRESB Real Estate Assessment (since 2016)− Awarded Highest Green Star Ranking in 2019 for third year in a row
 Assessment Key Points• Performance Index, Risk & Opportunities, Stakeholder Engagement
 Awarded Three Stars in the GRESB Rating (maximum five stars)

Environmental Certifications: 9 Assets, 18.8% of Total Leasable Area for Offices
CASBEE(Comprehensive Assessment System
for Built Environment Efficiency)
S rankIchigoTakamatsu
Building

IchigoMarunouchi
Building

BELS(Building-housing Energy-efficiency
Labeling System)
A rankEbisu
Green Glass

IchigoSakaisuji
Honmachi
Building

Ichigo Sendai
East Building

2 Stars (★★)

1 Star (★)

Ichigo Akihabara
North Building

Ichigo Omiya
Building(as of October 31, 2019)
DBJ Green Building

3 Stars (★★★) 2 Stars (★★)

Ichigo Nihonbashi
East Building

Win Gotanda
Building

Energy Efficiency− HVAC upgrades and LED lighting installations to lower energy consumption− Energy-saving diagnosis conducted by Tokyo Metropolitan Center for Climate Change Actions

Sustainable Real Estate Serving a Sustainable Society− End wasteful practices of demolishment and embrace value-add− Lengthen useful life and improve quality of existing real estate© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

31

Ichigo Office ESG

SocialTenant Satisfaction Surveys to Learn & Respond to Tenant Needs− Promote exercise and convenience throughbike-sharing & free umbrella services

Bike Sharing

Night Patrols

Halloween Clean-Up

Snow Shoveling

Help Disaster-Struck Communities− Send engineers and donate emergency equipment tosupport disaster recovery and response

Participation in Local Community Associations
and Events

Elevator Emergency Kits
& AEDsVending Machines as partof Disaster Recovery

Emergency Drills

Healthy and Supportive Workplace− Support Work-Life Balance & Promoting Gender Equality
 Extensive measures to support career development for women employees• Ichigo employee return rate from childcare leave: 100%
− Sports & Arts Support world-class athletes in weightlifting, rifle shooting, and track & field Gold Sponsor of Paralym Art to support artists with disabilities− Social Welfare Activities Support University of Miyazaki’s Program for Children with Cancer− Local Communities
 Promoting community development via sponsorship of J.League
 Working to strengthen local communities, create jobs, and increase
Japan’s food self-sufficiency via support for Smart Agriculture© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

©J.LEAGUE

32

Ichigo Office ESG

Governance
REIT

Asset Management Company (AMC)− Monitors Asset Management Company− All Ichigo Office Directors are Independent Directors− Active dialogue and effective internal controls via Board
discussions led by REIT Executive Director− Draw upon expertise of REIT Supervisory Directors(qualified lawyers & accountants)− Majority of AMC Directors (3 of 5) are Independent Directors− Independent asset management team & best-practiceexecution on behalf of Ichigo Office REIT within AMC− Compliance and Audit are directly under the AMC President
to monitor and review critical compliance matters− Ensure objectivity by including third-party, independentlawyers and accountants in the Investment Committee &Risk & Compliance Committee

Independence of REIT from AMC➡ 31 of 63 J-REITs have AMC Presidents serving as Executive Director of the REIT
All Ichigo Office Directors are Independent
Independent Directors at AMC➡ Only 4 Asset Management Companies have any Independent Directors
Majority (3 of 5) of Ichigo AMC Directors are Independent

Ichigo Office (8975) and Ichigo Hotel (3463) are the only J-REITs (out of 63)
that both have an AMC board that has a majority of Independent Directors and whose
AMC President does NOT serve as the Executive Director of the REIT

© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

33

Appendix: Financial & Portfolio Data

© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

34

October 2019 vs. April 2019 Earnings(JPY million)
April 2019
Actual (B)October 2019
Actual (A)vs. April 2019(A) - (B)

Major Variation Factors (vs. April 2019)

Operating Revenue

8,451

8,304

-146

Operating Profit

4,510

4,363

-147

Recurring Profit

3,733

3,554

-178

Net Income

3,732

3,554

-178

Dividend Reserve (-)

382

364

-17

Dividend Reserve Release (+)

105

105

–

Dividend

JPY 2,255

JPY 2,150-JPY 105EPS

JPY 2,000

JPY 2,032+JPY 32

NOI

5,648

5,679

+30

85

85

–

Occupancy (on Last Day of Period)

99.3%

99.4%

+0.1%

Average Occupancy

99.3%

99.3%

–

No. of Assets

Decrease in Gains on Sale of Real Estate -228
April 2019 668, October 2019 440
Increase in Rental Income +80
Increase due to April 2019 asset acquisition +46
Increase due to October 2019 asset acquisition +59
Decrease due to April 2019 asset sale -39
Decrease due to October 2019 asset sale -59[Existing Assets]
Increase in common area services income +55(Ichigo Otsuka Building +5)(Ichigo Nishiki First Building +5)(Ichigo Nakano North Building +4)
Increase in utilities income due to weather fluctuation +36
Decrease in lease termination penalties and subsidies -17
Increase in Rental Expenses +34
Increase due to April 2019 asset acquisition +31
Increase due to October 2019 asset acquisition +24
Decrease due to April 2019 asset sale -24
Decrease due to October 2019 asset sale -14[Existing Assets]
Increase in property tax +27
Increase in service provider expenses (mainly brokerage fees) +8
Decrease in depreciation -18
Decrease in Operating Expenses (excluding Rental Expenses) -33
Decrease in asset sale fee and performance fee to asset manager -37
Decrease in non-deductible consumption tax -3
Increase in other operating expenses +7
Decrease in Non-Operating Revenue -26
Decrease in insurance income -25
Increase in Non-Operating Expenses +4
Increase in interest expenses (including bond interest) +8
Decrease in up-front loan fees & related expenses -4* NOI = Rental Income - Rental Expenses + Depreciation
No. of Assets is Period-End© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

35

Rapid Re-Tenanting After Vacancies
Newly Leased and Newly Vacated Office Space (m2)
Newly Leased
Newly Vacated

13,185

5,982

5,778

4,636

5,723

-4,028-5,300-6,355-5,590-7,263-11,434
October 2017

April 2018

October 2018

April 2019

October 2019

Newly Leased

5.3%

11.3%

4.8%

3.5%

4.6%

Newly Vacated

5.7%

9.8%

4.4%

3.0%

4.5%

Net Leasing-372+1,751

+477

+608

+133

© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

April 2020
(Forecast)
TBD
5.8%
TBD

36

Borrowing Details (1)Loan Details

Average Interest Rate and Average Remaining Loan Maturity(Interest Rate)(Average Remaining Loan Maturity including Bonds, Years)

2.5%

5

Average Interest Rate
Average Remaining Loan Maturity

Borrowings and Bond Issuancein the October 2019 Period
Maturity

Interest
Rate

JPY 4.96B 7.6 years

0.822%(Fixed)JPY 413M 6.1 years

0.698%(Fixed)JPY 692M 6.4 years

0.726%(Fixed)Bond

JPY 1.20B 10.0 years

0.890%

Total/
Average

JPY 7.26B 7.7 years

0.814%

Amount4

2.0%

3.2 years

3.4 years

3.2 years

3.3 years

3.3 years

1.5%

3

1.0%

2

1.00%

1.02%

1.02%

1.00%

0.99%
1

0.5%

Bank
Loans

0

0.0%
October 2017

April 2018

October 2018

April 2019

October 2019

9.1%

6.0%

3.1%

2.3%

90.9%

94.0%

96.9%

97.7%

Apr 2018

Oct 2018

Apr 2019

Oct 2019

Fixed vs. Floating Loan Ratio
Fixed

Floating

17.7%

100%

Fixed *
Floating* Fixed includes
floating loans
fixed via
interest rate
swaps

82.3%

Oct 2017© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

0%37

Borrowing Details (2)Loan Maturity Distribution (as of October 31, 2019)
Bank Loans (fixed rate including fixed via interest rate swaps)
Bank Loans (floating rate)
Bonds(JPY million)

10,233
9,639

9,574

9,629

9,633

9,623

8,814

8,846
1,000

7,266

6,346
4,955

4,600

7,859

7,246
2,900

2,793

2,000
955
Apr
2020

900
Oct
2020

Apr
2021

Oct
2021

Apr
2022

Oct
2022

Apr
2023

Oct
2023

Apr
2024

1,200

1,000

Oct
2027

Apr
2028

1,200

600
Oct
2024

Apr
2025

Oct
2025

Apr
2026

Oct
2026

Apr
2027

Oct
2028

Apr
2029

Oct
2029

LTV (as of October 31, 2019)
55
LTV
50

LTV (Market Value-Basis)*

47.5%

46.9%

47.6%

48.1%

41.6%

42.5%

41.5%

41.7%

41.7%

Apr 2017

Oct 2017

Apr 2018

Oct 2018

Apr 2019

48.0%

45.7%
45

40

40.8%

* Market Value =Total Assets +Unrealized Gains35© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

Oct 2019

38

Lender Base and Ichigo Office Credit Rating
Lender Base (as of October 31, 2019)

Credit Rating(JPY million)

LenderSMBC

Amount

Ratio
25.3%

Mizuho Bank

27,447
18,897

Shinsei Bank

13,755

12.7%

MUFG Bank

11,872
9,961

10.9%

8,650
3,400

8.0%
3.1%

ORIX Bank

3,308
2,190

The Kagawa Bank

1,715

1.6%

Mizuho Trust

1.5%

Nishi-Nippon City Bank

1,638
1,218

Total

104,056

95.9%

Aozora Bank
Resona Bank
Development Bank of Japan
Bank of Fukuoka

Bonds

Amount17.4%

Type of Rating

Long-Term Issuer Rating

RatingA

Rating Outlook

Stable

3.1%
2.0%

1.1%

Ratio

1,200

1.1%

Unsecured Bond No.2
Unsecured Bond No.3

1,000
1,000

0.9%

Unsecured Bond No.4

1,200
4,400
108,456

1.1%

Total Interest-Bearing Liabilities

Japan Credit Rating Agency (JCR)

9.2%

Unsecured Bond No.1

Total

Credit Rating Agency

0.9%
4.1%
100.0%© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

39

Continued Growth in Portfolio Unrealized Gains
Unrealized Gains of JPY 39.7B, +JPY 5.3B vs. April 2019
(JPY million)
500,000

Period-End Book Value

Period-End Appraisal Value30%

Unrealized Gains

19.82%

400,000

17.13%

15.98%

15.01%

20%

13.09%
11.17%
9.36%

300,000

10%

8.18%
5.13%

3.79%

220,799

209,667
207,537
188,598
195,249
189,765

200,000

219,100

190,506

229,198

197,617234,805

200,472

240,131200,413

173,447
174,955
164,977
161,7210%

126,359
121,741-10%

100,000-20%0
Apr 2015(65 assets)

Oct 2015(77 assets)

Apr 2016(73 assets)

Oct 2016(85 assets)

Apr 2017(82 assets)

Oct 2017(85 assets)

Apr 2018(82 assets)© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

Oct 2018(85 assets)

Apr 2019(85 assets)

Oct 2019(85 assets)

40

Lease Renewals
October 2019: Change in Monthly Rent by Asset Type((JPY million)
Asset
Acquisition

Asset Sale

Oct 31, 2019
(B)

+4

–

+10

–

1,101

+19

+9

–

–

–

–

-10

53

-10

–

-27

+4

–

+10

-10

1,154

+9

+9

New
Contracts

Contract
Terminations

Office

1,082

+32

-27

Other

63

–

Total

1,145

+32

UpwardChange(B) - (A)Change at
Existing
AssetsDownward

Apr 30, 2019
(A)

October 2019: Lease Renewals by Asset Type
Asset Type
UpwardDownward

Flat

Total

No. ofAssetsLeasedArea

Change in Rent
(Semi-Annual)

Change from
Previous Rent

Office46

16,309m2+JPY 29.2M

+6.6%

Other

–

–

–

–

+JPY 29.2M

+6.6%

2

Total

46

16,309m

Office

–

–

–

–

Other

–

–

–

–

Total

–

–

–

–

–

–

–

–

2

Office160

34,047m

Other

–

–

Total

160

34,047m2––

Office206

50,357m

2+JPY 29.2M

+2.2%

Other

–

–

–

–

+JPY 29.2M

+2.2%

Total

206

50,357m

2* Excludes assets sold during the October 2019 period© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

41

Leased Area
October 2019: Leased Area by Asset Type((m²)

Apr 30, 2019

New Contracts

Contract
Terminations

Asset
Acquisition

Office244,679+5,723-5,590+2,845–

247,658+2,978

+133

Other

18,328–––-1,185

17,142-1,185–

Total

263,008+5,723-5,590+2,845-1,185

264,801+1,792+133

Asset Sale

Oct 31, 2019

Change at
Existing Assets

ChangeOctober 2019: New Leases & Lease Terminations by Asset Type
New Leases

Lease Terminations
Asset Type

Upward

Flat

Total

LeasedArea

Total Rent
(Semi-Annual)

No. ofAssetsLeasedArea

Total Rent
(Semi-Annual)

Office31

5,106m2+JPY 179M

Office28

5,590m2-JPY 167M

Other

–

–

–

Other

–

–

–

31

5,106m2+JPY 179M

Total

28

5,590m2-JPY 167M

2+JPY 2M

Total
Downward

No. ofAssets

Office

1

131m

Other

–

–

–

Total

1

131m2

+JPY 2M

Office4

2+JPY 13M

Other

–

–－

–

Total

4

486m2

+JPY 13M

Office36

5,723m2+JPY 194M

Other

–

–

–

Total

36

5,723m2+JPY 194M

486m* Excludes assets sold during the October 2019 period© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

42

Survey of New & Departing Tenants: Why Relocating?
New Tenants

Departing Tenants

Moving to a different building for larger floor space or better location

Moving to a different building for larger floor space or better location

Opening a new office

Closing office

Reducing cost or floor space

Reducing cost or moving to a different building to integrate with other divisions

Other

Other

7.4%
11.1%

Apr 2018

51.9%

Oct 2018

51.7%

37.9%

Apr 2019

50.0%

37.5%

Oct 2019

61.1%

29.6%

33.3%

Apr 2018

14.3% 14.3%

6.9%
3.4%

Oct 2018

28.6%

10.7%

50.0%

10.7%

8.3%
4.2%

Apr 2019

28.6%

9.5%

52.4%

9.5%

0%
5.6%

Oct 2019

14.3%© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

17.9%

67.9%

57.1%

3.6%

10.7%

43

Decreasing Free-Rent Incentives
Free Rent Incentive Trends

Rental Income Loss due to Free Rent
(Months)

3

Tokyo Metro Area (Average)
Regional Cities (Average)(JPY million)
Loss from Free Rent

46

Actual Rent Income

21

13

6,614

6,811

6,876

Oct 2018

Apr 2019

Oct 2019

94

81

6,471

Apr 2018

2.1
2
1.7
1.6

1.6
1.2

6,498

1.1

1
0.7
0.7

0

Oct 2017

Apr 2018

Oct 2018

0.8

Apr 2019

0.7

Oct 2019

Oct 2017© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

44

Value-Add Capex Plan
Capex Tailored to Tenant Needs
Maintenance Costs, Capex, and Depreciation

April 2020 Capex Plan
(JPY million)

1,200

Maintenance

900

CAPEX

842

857

Depreciation

835

840

725
589

600

Investment

Ichigo Nogizaka Building

Entrance Hall Renovation

JPY 30M

Ichigo Kawasaki Building

Elevator Upgrade

JPY 27M

Ichigo Nogizaka Building

Exterior Wall Renovation

JPY 27M

Ichigo Nishi Honmachi Building Air Conditioning Upgrade

JPY 20M

October 2020 Capex Plan
Asset Name

300

133

147

124

0

Apr 2019

Details

478

442

138

Asset Name

Oct 2019

Apr 2020
Forecast

Oct 2020
Forecast

Details

Investment

Ichigo Nogizaka Building

Rooftop Renovation

JPY 30M

Ichigo Nogizaka Building

HVAC Upgrade

JPY 27M

Ichigo Nishi Honmachi Building Air Conditioning Upgrade

JPY 26M

Ichigo Mirai Shinkin Building

JPY 23M© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

Multi-Story Parking Lot Renovation

45

Portfolio Growth as REIT Specializing in Mid-Size Offices
As of October 31, 2018

As of April 30, 2019

As of October 31, 2019Total

85 assets

85 assets

85 assets

Office77 assets

79 assets

80 assets

Other

8 assets

6 assets

5 assets

Total

JPY 199.9B

JPY 203.0B

JPY 203.2B

Office

93%

95%

96%

Other

7%

5%

4%

Central Tokyo

57%

58%

57%

Tokyo Metropolitan Area

22%

22%

22%

Four Major Regional Cities

14%

14%

15%

Other Regional Cities

6%

6%

6%

Appraisal Value

JPY 229.1B

JPY 234.8B

JPY 240.1B

Leasable Area

263,440m2

264,762m2

266,478m2

99.2%

99.3%

99.4%

923

921

934

5.5%

5.6%

5.6%

No. of Assets

Portfolio Size

Area

Occupancy
No. of Tenants
NOI Yield••

Annualized NOI Yield. Four Major Regional Cities refers to Osaka, Nagoya, Fukuoka, and Sapporo.
NOI Yield is calculated excluding assets sold in each period; NOI Yield of assets acquired in the October 2019 period are determined from the annual
NOI calculated using a DCF method based on appraisal value at acquisition.

© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

46

High Seismic Safety Level
Acquisition Guidelines− Seismic safety：Compliant with new seismic standard− Seismic PML1：Stand-alone PML of 20% or less, with a non-exceedance probability of
90% for the entire portfolio
Portfolio Assets Seismic Safety Profile (as of October 31, 2019)

Assets Built under Old SeismicStandard, but Seismic Renovation
Completed
4 assets(Leasable Area Ratio 6.7%)

Portfolio PML

Assets Built under Old SeismicStandard, but Original Construction
Met New Earthquake ResistanceStandard2
3 assets

2.52%(Leasable Area Ratio 3.3%)

as of October 31, 2019
Assets Built under Old Seismic Standard, but
Seismic Renovation Completed (4 assets)
Ichigo Sakae Building, Ichigo Mita Building, Ichigo Gotanda Building,and Ichigo Higashi Ikebukuro Building

New Earthquake ResistanceStandard
78 assets(Leasable Area Ratio 90.0%)

Assets Built under Old Seismic Standard, but Original Construction
Met New Earthquake Resistance Standard (3 assets)2
Ichigo Ginza 612 Building, Ichigo Ofuna Building, andIchigo Nagoya Building

1 PML (Probable Maximum Loss) is the maximum expected loss from a large-scale earthquake (defined as an earthquake with an expected frequency of occurrence once

every 475 years, or a 10% chance of occurrence within the next 50 years) occurring in the next 50 years, expressed as a ratio to the estimated replacement cost.
2 Assets evaluated as having seismic strength equivalent to new earthquake resistance standards and for which a third-party seismic evaluation report has been obtained.

© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

47

Portfolio Details (1)as of October 31, 2019
Asset
Type

OfficeNo.

Acquisition
Book Value
Price(JPY M)(JPY M)

Leasable
Area
(m 2)

Oct 2019 Appraisal

Apr 2019 Appraisal

Value(JPY M)

Value(JPY M)

ChangeAsset Name

Area

Location

O-02 Ichigo Nishisando Building

Central Tokyo

Shibuya-ku, Tokyo

3,254

3,352

4,564.63

100.0%

3,290

4.1%

3,280

4.1%

+10

–

O-03 Ichigo Mita Building

Central Tokyo

Minato-ku, Tokyo

2,740

2,732

4,119.63

100.0%

3,620

4.2%

3,580

4.2%

+40

–

O-04 Ichigo Nanpeidai Building

Central Tokyo

Shibuya-ku, Tokyo

1,920

1,915

1,925.24

100.0%

2,670

3.5%

2,600

3.6%

+70

-0.1%

O-05 Ichigo Hanzomon Building

Central Tokyo

Chiyoda-ku, Tokyo

1,550

1,505

2,080.37

100.0%

1,950

3.7%

1,940

3.8%

+10

-0.1%

O-06 Ichigo Hijirizaka Building

Central Tokyo

Minato-ku, Tokyo

1,200

1,216

1,947.90

100.0%

1,470

4.5%

1,440

4.6%

+30

-0.1%

O-07 Ichigo Shibuya Kamiyamacho Building

Central Tokyo

Shibuya-ku, Tokyo

1,505

1,370

1,321.54

100.0%

1,880

3.8%

1,860

3.8%

+20

–

O-08 Ichigo Akasaka 5 Chome Building

Central Tokyo

Minato-ku, Tokyo

735

718

683.86100.0%

829

3.7%

826

3.8%

+3

-0.1%

O-09 Ichigo Shibakoen Building

Central Tokyo

Minato-ku, Tokyo

1,100

1,101

1,602.29

100.0%

1,160

4.3%

1,130

4.4%

+30

-0.1%

O-10 Ichigo Ebisu Nishi Building

Central Tokyo

Shibuya-ku, Tokyo

1,917

1,926

1,484.39

100.0%

2,510

3.8%

2,480

3.8%

+30

–

O-11 Ichigo Ginza 612 Building

Central Tokyo

Chuo-ku, Tokyo

1,773

1,779

1,387.09

100.0%

2,090

3.8%

2,030

3.8%

+60

–

O-12 Ichigo Uchikanda Building

Central Tokyo

Chiyoda-ku, Tokyo

1,140

1,129

1,378.83

100.0%

1,350

4.3%

1,210

4.4%

+140

-0.1%

O-14 Ichigo Yotsuya 4 Chome Building

Central Tokyo

Shinjuku-ku, Tokyo

550

507

780.64100.0%

590

4.2%

576

4.3%

+14

-0.1%

O-15 Ichigo Tameike Building

Central Tokyo

Minato-ku, Tokyo

580

521

494.14100.0%

722

3.8%

688

3.9%

+34

-0.1%

O-16 Ichigo Jimbocho Building

Central Tokyo

Chiyoda-ku, Tokyo

1,820

1,805

1,891.01

100.0%

2,420

4.1%

2,380

4.2%

+40

-0.1%

Occupancy

Cap rate

Cap rate

Value(JPY M)

Cap rate

O-17 Ichigo Hakozaki Building

Central Tokyo

Chuo-ku, Tokyo

1,150

1,141

2,387.34

100.0%

1,180

4.4%

1,150

4.5%

+30

-0.1%

O-18 Ichigo Kudan 2 Chome Building

Central Tokyo

Chiyoda-ku, Tokyo

763

730

1,288.31

100.0%

953

4.3%

936

4.4%

+17

-0.1%

O-19 Ichigo Kudan 3 Chome Building

Central Tokyo

Chiyoda-ku, Tokyo

844

818

1,302.43

100.0%

860

4.4%

851

4.5%

+9

-0.1%

O-20 Ichigo Gotanda Building

Central Tokyo

Shinagawa-ku, Tokyo

5,060

4,846

5,346.39

100.0%

6,320

4.5%

6,260

4.6%

+60

-0.1%

O-21 Ichigo Shin Yokohama Building

Tokyo Metro Area

Yokohama

1,816

1,697

4,021.32

97.7%

1,740

4.7%

1,920

4.7%

-180

–

O-22 Ichigo Minami Ikebukuro Building

Tokyo Metro Area

Toshima-ku, Tokyo

1,460

1,373

1,491.50

100.0%

1,790

4.0%

1,660

4.1%

+130

-0.1%

O-23 Ichigo Nakano North Building

Tokyo Metro Area

Nakano-ku, Tokyo

764

733

1,250.85

100.0%

935

4.8%

885

4.9%

+50

-0.1%

O-24 Ichigo Eitai Building

Tokyo Metro Area

Koto-ku, Tokyo

1,490

1,467

2,605.54

100.0%

1,320

4.7%

1,270

4.8%

+50

-0.1%

O-26 Ichigo Ikejiri Building

Tokyo Metro Area

Meguro-ku, Tokyo

2,030

1,950

2,385.69

100.0%

2,230

4.3%

2,230

4.4%

–

-0.1%

O-27 Ichigo Nishi Ikebukuro Building

Tokyo Metro Area

Toshima-ku, Tokyo

639

602

1,261.91

100.0%

966

4.4%

957

4.5%

+9

-0.1%

O-28 Ichigo Nishi Gotanda Building

Central Tokyo

Shinagawa-ku, Tokyo

765

756

1,329.06

100.0%

846

4.5%

826

4.6%

+20

-0.1%

O-29 Ichigo Kichijoji Building

Tokyo Metro Area

Musashino City, Tokyo

2,160

2,191

4,210.87

100.0%

2,920

4.8%

2,810

4.9%

+110

-0.1%

O-34 Ichigo Sakae Building

Four Major Cities

Nagoya

4,705

4,682

3,928.12

100.0%

6,490

4.8%

6,490

4.8%

–

–

O-37 Ichigo Marunouchi Building

Four Major Cities

Nagoya

6,710

5,754

8,009.11

100.0%

7,910

4.2%

7,700

4.3%

+210

-0.1%

O-38 Ichigo Toyamaeki Nishi Building

Other Regional Cities Toyama City, Toyama

1,645

1,525

8,601.71

99.1%

1,840

5.9%

1,730

6.0%

+110

-0.1%

© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

48

Portfolio Details (2)as of October 31, 2019
Asset
Type

OfficeNo.

Asset Name

Area

Location

Acquisition
Price(JPY M)

Book Value(JPY M)

Leasable
Area
(m 2)

Occupancy

Oct 2019 Appraisal

Apr 2019 Appraisal

Value(JPY M)

Value(JPY M)

Cap rate

Cap rate

ChangeValue(JPY M)

Cap rate

O-39 Ichigo Mirai Shinkin Building

Other Regional Cities Oita City, Oita

1,158

1,144

3,551.46

95.4%

1,320

6.0%

1,310

6.1%

+10

-0.1%

O-42 Ichigo Takamatsu Building

Other Regional Cities Takamatsu City, Kagawa

3,010

2,315

6,329.33

100.0%

3,650

6.1%

3,500

6.2%

+150

-0.1%

O-46 Ichigo Kanda Nishikicho Building

Central Tokyo

Chiyoda-ku, Tokyo

2,130

2,003

2,523.09

89.7%

3,310

3.8%

2,930

3.9%

+380

-0.1%

O-47 Ichigo Akihabara North Building

Central Tokyo

Chiyoda-ku, Tokyo

5,500

5,558

6,250.53

100.0%

7,130

4.4%

6,970

4.5%

+160

-0.1%

O-48 Ichigo Sakaisuji Honmachi Building

Four Major Cities

Osaka

1,940

1,777

3,729.35

100.0%

2,360

4.5%

2,320

4.6%

+40

-0.1%

O-49 Ichigo Kanda Ogawamachi Building

Central Tokyo

Chiyoda-ku, Tokyo

2,210

2,193

2,295.57

100.0%

2,540

4.1%

2,480

4.2%

+60

-0.1%

O-50 Ichigo Hatchobori Building

Central Tokyo

Chuo-ku, Tokyo

1,905

1,801

2,697.36

100.0%

2,680

4.5%

2,620

4.6%

+60

-0.1%

O-51 Ebisu Green GlassCentral Tokyo

Shibuya-ku, Tokyo

5,900

5,820

3,159.27

100.0%

6,890

3.5%

6,720

3.6%

+170

-0.1%

O-52 Ichigo Omori Building

Central Tokyo

Shinagawa-ku, Tokyo

3,850

3,788

3,585.93

95.2%

4,450

4.3%

4,230

4.4%

+220

-0.1%

O-53 Ichigo Takadanobaba Building

Central Tokyo

Shinjuku-ku, Tokyo

1,580

1,585

1,606.92

100.0%

1,910

4.0%

1,890

4.1%

+20

-0.1%

O-54 Ichigo Omiya Building

Tokyo Metro Area

Saitama City, Saitama

3,430

3,608

6,180.68

100.0%

4,100

5.1%

4,020

5.2%

+80

-0.1%
-0.1%

O-55 Ichigo Sagamihara Building

Tokyo Metro Area

Sagamihara City, Kanagawa

1,174

1,222

2,960.81

100.0%

1,280

5.3%

1,250

5.4%

+30

O-56 Ichigo Ofuna Building

Tokyo Metro Area

Kamakura City, Kanagawa

2,000

1,943

2,364.71

100.0%

2,620

5.3%

2,480

5.3%

+140

–

O-57 Ichigo Sendai East Building

Other Regional Cities Sendai

1,840

1,653

5,205.49

97.6%

2,140

5.5%

2,100

5.6%

+40

-0.1%

O-58 Ichigo Kumamoto Building

Other Regional Cities Kumamoto City, Kumamoto

1,450

1,474

4,507.59

96.8%

1,590

5.9%

1,580

6.0%

+10

-0.1%

O-59 Ichigo Jingumae Building

Central Tokyo

Shibuya-ku, Tokyo

7,200

7,416

4,510.04

100.0%

8,280

3.3%

8,050

3.4%

+230

-0.1%

O-60 Ichigo Shibuya Dogenzaka Building

Central Tokyo

Shibuya-ku, Tokyo

3,650

3,675

2,789.86

100.0%

5,350

3.4%

5,140

3.5%

+210

-0.1%

O-61 Ichigo Hiroo Building

Central Tokyo

Shibuya-ku, Tokyo

3,960

4,016

3,510.44

100.0%

4,710

3.8%

4,580

3.9%

+130

-0.1%

O-62 Ichigo Sasazuka Building

Central Tokyo

Shibuya-ku, Tokyo

4,780

4,924

6,425.29

100.0%

5,720

4.0%

5,620

4.1%

+100

-0.1%

O-63 Ichigo Nihonbashi East Building

Central Tokyo

Chuo-ku, Tokyo

4,700

4,517

4,216.97

100.0%

5,600

3.9%

5,470

4.0%

+130

-0.1%

O-64 Ichigo Sakurabashi Building

Central Tokyo

Chuo-ku, Tokyo

2,500

2,569

2,971.22

100.0%

3,080

3.9%

3,000

4.0%

+80

-0.1%

O-65 Ichigo Shinkawa Building

Central Tokyo

Chuo-ku, Tokyo

2,360

2,382

2,312.03

100.0%

2,930

3.8%

2,870

3.9%

+60

-0.1%

O-66 Ichigo Kudan Building

Central Tokyo

Chiyoda-ku, Tokyo

3,190

3,213

3,090.65

98.2%

3,590

3.9%

3,480

4.0%

+110

-0.1%

O-67 Ichigo Higashi Gotanda Building

Central Tokyo

Shinagawa-ku, Tokyo

3,660

3,651

4,548.10

100.0%

4,250

4.0%

4,180

4.1%

+70

-0.1%

O-68 Axior Mita

Central Tokyo

Minato-ku, Tokyo

1,800

1,744

2,369.82

100.0%

2,320

3.8%

2,260

3.9%

+60

-0.1%

O-69 Ichigo Higashi Ikebukuro Building

Tokyo Metro Area

Toshima-ku, Tokyo

4,570

4,608

4,472.00

100.0%

5,310

4.0%

5,070

4.1%

+240

-0.1%

O-70 Koriyama Big-i (Office Section)

Other Regional Cities Koriyama City, Fukushima

1,660

1,476

3,433.07

100.0%

2,120

5.1%

2,110

5.1%

+10

–

O-71 Ichigo Kawasaki Building

Tokyo Metro Area

Kawasaki City, Kanagawa

1,750

1,776

3,710.17

100.0%

2,180

4.2%

2,130

4.3%

+50

-0.1%

O-72 Ichigo Shibuya East Building

Central Tokyo

Shibuya-ku, Tokyo

1,350

1,350

1,041.36

100.0%

1,610

3.5%

1,570

3.6%

+40

-0.1%

© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

49

Portfolio Details (3)as of October 31, 2019
Asset
Type

OfficeNo.

Asset Name

Area

Location

Acquisition
Book Value
Price(JPY M)(JPY M)

Leasable
Area
(m 2)

Occupancy

Oct 2019 Appraisal

Apr 2019 Appraisal

Value(JPY M)

Value(JPY M)

Cap rate

Cap rate

ChangeValue(JPY M)

Cap rate

O-73 Ichigo Ningyocho Building

Central Tokyo

Chuo-ku, Tokyo

1,450

1,480

1,769.09

100.0%

1,610

4.1%

1,580

4.2%

+30

-0.1%

O-74 Ichigo Nishi Honmachi Building

Four Major Cities

Osaka

2,190

2,136

6,152.00

100.0%

2,470

4.7%

2,450

4.8%

+20

-0.1%

O-75 Ichigo Hakata Building

Four Major Cities

Fukuoka

1,380

1,362

2,423.86

100.0%

1,520

4.8%

1,500

4.9%

+20

-0.1%

O-76 Ichigo Nishiki First Building

Four Major Cities

Nagoya

2,000

1,973

3,324.70

100.0%

2,140

4.5%

2,100

4.6%

+40

-0.1%

O-77 Ichigo Ikenohata Building

Tokyo Metro Area

Taito-ku, Tokyo

5,130

5,138

5,504.15

100.0%

5,500

4.2%

5,390

4.3%

+110

-0.1%

O-78 Ichigo Ikebukuro East Building

Tokyo Metro Area

Toshima-ku, Tokyo

3,010

2,979

3,118.69

100.0%

3,290

4.2%

3,240

4.3%

+50

-0.1%

O-79 Ichigo Motoazabu Building

Central Tokyo

Minato-ku, Tokyo

1,890

1,912

1,329.96

100.0%

2,290

3.5%

2,050

3.5%

+240

–

O-80 Ichigo Otsuka Building

Tokyo Metro Area

Toshima-ku, Tokyo

2,740

2,734

3,679.70

100.0%

3,040

4.3%

2,940

4.4%

+100

-0.1%

O-81 Ichigo Nagoya Building

Four Major Cities

Nagoya

3,420

3,482

4,930.30

100.0%

3,900

4.4%

3,850

4.5%

+50

-0.1%

O-82 Ichigo Fushimi Building

Four Major Cities

Nagoya

2,340

2,329

4,155.57

96.7%

2,510

4.6%

2,450

4.7%

+60

-0.1%

O-83 Ichigo Nishiki Building

Four Major Cities

Nagoya

1,330

1,287

2,006.78

100.0%

1,460

4.5%

1,430

4.6%

+30

-0.1%

O-84 Ichigo Minami Morimachi Building

Four Major Cities

Osaka

1,040

1,008

2,521.51

100.0%

1,170

4.5%

1,140

4.6%

+30

-0.1%

O-85 Ichigo Shibuya Udagawacho Building

Central Tokyo

Shibuya-ku, Tokyo

3,500

3,587

1,491.68

100.0%

4,160

3.3%

4,060

3.4%

+100

-0.1%

O-86 Win Gotanda Building

Central Tokyo

Shinagawa-ku, Tokyo

3,100

3,107

3,689.88

100.0%

3,320

4.1%

3,280

4.2%

+40

-0.1%

O-87 Ichigo Hongo Building

Tokyo Metro Area

Bunkyo-ku, Tokyo

2,300

2,292

2,722.58

100.0%

2,510

4.3%

2,390

4.4%

+120

-0.1%

O-88 Oimachi Center Building

Central Tokyo

Shinagawa-ku, Tokyo

1,680

1,697

2,751.08

100.0%

1,960

4.2%

1,910

4.3%

+50

-0.1%

O-89 Win Gotanda Building 2

Central Tokyo

Shinagawa-ku, Tokyo

3,300

3,306

3,433.16

100.0%

3,590

4.1%

3,530

4.2%

+60

-0.1%

O-90 MIF Building

Central Tokyo

Chiyoda-ku, Tokyo

2,200

2,201

1,690.33

100.0%

2,370

4.0%

2,330

4.1%

+40

-0.1%

O-91 Ichigo Uchi Honmachi Building

Four Major Cities

Osaka

1,900

1,993

3,004.07

94.2%

2,180

4.6%

2,110

4.7%

+70

-0.1%

O-92 Ichigo Minami Otsuka Building

Tokyo Metro Area

Toshima-ku, Tokyo

2,780

2,867

3,127.84

100.0%

3,180

3.9%

3,080

4.0%

+100

-0.1%

O-93 Ichigo Nogizaka Building

Central Tokyo

Minato-ku, Tokyo

3,315

3,373

2,175.88

87.5%

3,580

3.4%

3,580

3.4%

–

–

O-94 Ichigo Hakata East Building

Four Major Cities

Fukuoka

2,250

2,254

2,901.99

100.0%

2,480

4.4%

2,480

4.4%

–

–

194,237

191,578

249,335.62

99.3%

230,101

Subtotal - Office224,495+5,606* April 2019 Appraisal Value and Cap rate for the Ichigo Hakata East Building (O-94),
acquired in October 2019 period, are those at the time of acquisition© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

50

Portfolio Details (4)as of October 31, 2019
Asset
Type

Other

No.

Asset Name

Area

Location

Acquisition
Book Value
Price(JPY M)(JPY M)

1,210

1,071

Leasable
Area
(m 2)

3,733.68

Occupancy

100.0%

Oct 2019 Appraisal

Apr 2019 Appraisal

Value(JPY M)

Value(JPY M)

1,450

Cap rate

5.7%

1,440

Cap rate

5.7%

ChangeValue(JPY M)+10

Cap rate

Z-09

Konami Sports Club Izumi Fuchu

Other Regional Cities Izumi City, Osaka

Z-10

Ichigo Shibuya Bunkamura Dori Building

Central Tokyo

Shibuya-ku, Tokyo

2,400

2,459

778.77100.0%

3,030

3.2%

3,220

3.2%

-190

–

Z-11

Twicere Yokohama Isogo (Retail Section)

Tokyo Metro Area

Yokohama

1,620

1,498

2,717.77

100.0%

1,500

5.1%

1,880

5.2%

-380

-0.1%

Z-12

Lions Square Kawaguchi

Tokyo Metro Area

Kawaguchi City, Saitama

2,430

2,364

7,788.09

100.0%

2,530

4.5%

2,520

4.5%

+10

–

Z-14

Ichigo Kamata Building

Tokyo Metro Area

Ota-ku, Tokyo

4.5%

1,520

4.6%

–

-0.1%

1,400

1,440

2,124.68

100.0%

1,520

Subtotal - Other

9,060

8,835

17,142.99

100.0%

10,030

10,580- 550

Total (85 Assets)

203,297

200,413 266,478.61

99.4%

240,131

235,075+5,056–

Reference: Investment made in the October 2019 Period
TK Equity
Investment

Tachikawa Holdings GK TK Equity Interest

JPY 50M© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

51

Appendix: About Ichigo Office© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

52

Specialized Office REIT
Specialized Office REIT Focusing on Mid-Size Offices, an Asset Class that
Offers Both Return Stability and Upside Potential
 Mid-size office characteristics‒ Stable cashflows supporting earnings‒ Upside earnings potential in economic upturns‒ Value-add potential due to relatively inefficient market

 Portfolio focused on Tokyo Metropolitan Area
 Driving accretive growth via value-add capex and hands-on asset management© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

53

Portfolio: 96% Office, 79% Tokyo Metropolitan Area
as of October 31, 2019
No. of Assets
Total Acquisition PriceAppraisal Value
Leasable Area
Occupancy

85 Assets
JPY 203.3B
JPY 240.1B
266,478m2
99.4%

By Asset Type

Other
4%

Map Key
Location
Acquisition Price (JPY B)% of Portfolio

Tokyo
Metro
Area
160.1
79%

Sendai1.8
1%Nagoya20.5
10%
Fukuoka
3.6
2%

Office96%

By Size<JPY 1B
3%

Kansai
8.2
4%

JPY 1B-2B
27%
Other
8.9
4%

>JPY 3B50%
JPY 2B-3B
21%© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

54

Highly Diversified Tenant Mix
as of October 31, 2019

Tenants by Industry

Total Number of Tenants: 933(based on No. of tenants)
Education2%
Construction
3%
Real Estate
4%

Share of Top 10 Tenants
12.2% of Leased Area
14.1% of Rental Income

Other
6%

Restaurant/
Hotel
4%

Service28%

Top 10 Tenants (by Building & Leased Area)

Finance
5%

Asset Name

Manufacturing
14%
Retail19%
IT
15%* Service: Primarily advertising, consulting, HR, accounting, legal,
beauty-related, and public entities.

Leased Area

Industry

2

(m )

Share

1

Ichigo Akihabara North Building

Manufacturing

6,250

2.4%

2

Lions Square Kawaguchi

Supermarket

4,263

1.6%

3

Ichigo Sasazuka Building

Telecommunication

3,827

1.5%

4

Konami Sports Club Izumi Fuchu

Sports Club

3,733

1.4%

5

Ebisu Green Glass

Telecommunication

2,863

1.1%

6

Ichigo Ikebukuro East Building

Service

2,427

0.9%

7

Ichigo Hiroo Building

Retail

2,417

0.9%

8

Ichigo Jingumae Building

Telecommunication

2,146

0.8%

9

Ichigo Toyamaeki Nishi Building /Ichigo Takamatsu Building

Manufacturing

1,846

0.7%

10

Ichigo Kamata Building

Retail

1,820

0.7%

31,597

12.2%

Total

© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

55

Growth via Serving Tenants & Shareholders

Total Assets (JPY B)

Dividend (JPY)
2,255
2,150

1,494

1,537

1,541

1,547

1,706

1,740

165.6

162.7

1,603

1,387

1,904

1,923

191.0

189.8

1,930
196.9

1,964

192.5

2,014
199.9

203.0

203.2

1,219
1,031*

107.9

104.8

106.1

104.3

112.3

114.3

114.0

123.3

October
April
October
April
April
April
April
October
October
October
October
October
October
April
April
October
April
2011
2012
2016
2018
2019
2013
2014
2015
2012
2014
2016
2019
2013
2015
2017
2017
2018
(71 Assets) (67 Assets) (67 Assets) (66 Assets) (68 Assets) (71 Assets) (70 Assets) (65 Assets) (77 Assets) (73 Assets) (85 Assets) (82 Assets) (85 Assets) (82 Assets) (85 Assets) (85 Assets) (85 Assets)
MergerComprehensive
Refinancing

AccretivePO

AccretivePO

AccretivePO

Accretive
PO

Strategic
Restructuring

Transition to
Pure Office
REIT

Accretive
PO

Strategic
Restructuring

Bond
Issuance

Strategic
Restructuring

Bond
Issuance

JCR Credit
Rating A

Bond
Issuance

Bond
Issuance

Strategic
Restructuring

Strategic
Restructuring

JCR Credit
Rating ADeCollateralizationof All Loans* October 2011 dividend adjusted to reflect 7:1 stock split on November 1, 2011

© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

56

Acquisition-Driven Growth− Total Asset Acquisitions: JPY 144.9B− 56.9% via Sponsor Support (JPY 82.5B)
Cumulative Total
JPY 144.9B

Acquisitions and Sales Since October 2013 (Cumulative, JPY B)■ Acquisition from Sponsor■ Sale to Sponsor■ Acquisition from Third Party■ Sale to Third Party
54.4

50.9

56.3

Acquisition
from Sponsor

50.9

4.3
Acquisitions
Sales

8.6
0.8

Acquisition fromThird Party
62.4(43.1%)

67.6

74.7

80.2

82.5
(56.9%)

19.3

19.3

23.8

23.8

26.2

7.9

12.3

12.3

18.3

~ Oct 2017~ Oct 2018

38.4

12.4
7.4

Oct 2013~ Oct 2014

Jun 2013
Initial Public
Offering(Post-Merger)

Dec 2013
Public Offering~ Oct 2015

~ Oct 201621.9
~ Oct 2019

Dec 2018
Apr&May 2018
Nov 2016
Apr&May 2016
Dec 2014
Public Offering
Public Offering Acquisition from Acquisition&Sale Acquisition&Sale
Third Party
Acquisition&Sale Acquisition&Sale
May 2019
Sep 2018
Apr&May 2017 Acquisition from Acquisition&Sale
May 2015
Third Party
Acquisition&Sale
Public Offering
Sept 2015
Transition to
Pure Office REIT

© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

57

Tailored Ichigo Tenant Services & Hospitality
Tailored Tenant Services to Increase Tenant Satisfaction− Tenant services focus on increasing tenant safety and comfort via Ichigo
Property Management Standard− Conduct regular tenant satisfaction surveys to reflect feedback in tenant
services
August 2018 Survey Overview
Respondents

Tenant General
Affairs Personnel

No. ofDistributed
Surveys913

No. ofAssets84

No. ofResponses

638 (69.9%)

Overall Satisfaction – Building Quality & Functionality

Satisfied
18%

Somewhat Satisfied
55%

Somewhat
Dissatisfied 10%

Dissatisfied
2%
Tenant Feedback(Plumbing, HVAC,
Elevator Improvements)

Neither
Satisfied nor
Dissatisfied
16%

Overall Satisfaction – Tenant Services
Satisfied33%

Somewhat Satisfied
48%

Neither
Satisfied nor
Dissatisfied
14%

Dissatisfied
1%

Somewhat
Dissatisfied 4%© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

58

Ichigo Branding: Safety, Quality, Design, Tenant Service
Improve the safety, quality, and design of assets via Ichigo’s
architectural and engineering capabilities to support high tenantsatisfaction© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

59

Ichigo Branding: Ichigo Layout Office and Ichigo Lounge
Provide Differentiated Ichigo Layout Office and Ichigo Lounge High-Quality
Office Spaces
Ichigo Layout Office Ichigo Jimbocho Building (Chiyoda-ku Tokyo)
 Generating substantially higher rents reflecting higher value for tenants
 Supporting needs of startups and accommodating expansion by offering flexible layout

Floor Plan

Flexible Layout

Windows & Natural Light

Work Space

Conversation Space

Ichigo Lounge Ichigo Higashi Ikebukuro Building (Toshima-ku Tokyo)
 Subdivided a vacant floor to create several private offices and a shared-use space for the exclusive use of tenants
 Generated significantly higher rents by offering attractive shared-use space

Reception
Ichigo Lounge© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

60

Japanese Mid-Size Office Investment Attractiveness (1)Rich Pool of REITable Assets
 90%+ of Japanese real estate = mid-size High liquidity

Breakdown of Buildings in Japan by Floor Area (m²)
< 500

2,000 to 5,000

1,000 to 2,000

5,000 to 10,000>10,000

Mid-Size Real Estate：94%

Broad and Deep Tenant Base
 95% of all companies have 50 employees or less
 Diverse sectors & industries

500 to 1,000

43%

25%

15%

10
%

4%
3%

Source: Ministry of Land, Infrastructure, Transportation andTourism (2013)

Largely Untapped by Professional Management
 High ownership by individuals and “passive owner” corporations

results in inadequate building maintenance Lacking professional building and management specifications
Breakdown of Companies by Number of Employees

Abundant Opportunities for Large-Scale Improvements Increase safety via seismic reinforcement
 Increase tenant satisfaction via value-add capex<5

6 to 20

21 to 50

> 51

% of Companies Suited to Mid-Size Assets：95%
64%

24%

7
5%
%

Source: Small and Medium Enterprise Agency (2017)

Significant Value-Add Potential© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

61

Japanese Mid-Size Office Investment Attractiveness (2)Mid-Size Office Rents More Stable than Larger-Size Office Rents
Office Rent Trends in 5 Central Tokyo Wards (Chiyoda, Chuo, Minato, Shinjuku & Shibuya Wards)
JPY per Tsubo (3.3m2)

60,00050,00040,000

Grade A

30,000

Grade A-

20,000

Grade B

10,000

0
2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Source: CBRE
Grade A refers to buildings in the 5 central wards of Tokyo (Chiyoda, Chuo, Minato, Shinjuku, and Shibuya) built no more than 11 years ago (therefore meetingcurrent seismic resistance requirements), with leasable area of 21,450 square meters and total floor area of 33,000 square meters.
Grade A- and Grade B refers to buildings located in any of the 23 wards in Tokyo with leasable area of 14,850 square meters and total floor area of 23,100 square
meters and leasable area of 660 square meters and total floor area of 6,600 to 23,100 square meters, respectively, and meeting current seismic resistancerequirements.
© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

62

Reference: AM Fee Structure
AM Fee Structure with High Shareholder Alignment
AM Fee I

Total Assets x 0.25%
a. Recurring Cash Flow Basis

AM Fee II(a + b)

Period-End Recurring Cash Flow x 2.0%
b. Total Dividend Basis
Each Fiscal Period’s Dividend x 2.0%

Asset Acquisition Fee

Acquisition Price x 0.5% (0.25% if acquiring from related party)

Asset Sale Fee

Sale Price x 0.5% (0.25% if selling to related party)
a. If Cash Flow per Share (CF per Share) Increased During the Previous Six Consecutive
Periods Including the Period When the Fee is Calculated

Performance Fee(a or b)(CF per Share of Current Period – CF per Share of Previous Period) x Total Number of
Shares Issued and Outstanding x 30%
b. If CF per Share is Above the Simple Average of CF per Share of the Latest Six Periods(CF per Share of Current Period – Simple Average of CF per Share of the Latest Six
Consecutive Periods) x Total Number of Shares Issued and Outstanding x 30%

Merger Fee

Valuation of Real Estate or Real Estate Securities Succeeded Upon Merger x 0.5%

* CF per Share = Recurring Profit/Loss in Income Statement + Depreciation + Accrued Asset Depreciation + Gain on Sale of Assets+ Valuation Profit/Loss (Excluding Extraordinary Profit/Loss) divided by shares outstanding
Please refer to “Fees Paid to the Asset Management Company (Articles of Incorporation Article 38 and Attachments)”
in Ichigo Office’s Annual Report (Japanese only) for details.

© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

63

Ichigo Office’s Sponsor: Ichigo (2337)
Core Businesses: Asset Management, Sustainable Real Estate, Clean Energy‒‒‒‒

Manages Ichigo Office (8975), Ichigo Hotel (3463), and Ichigo Green (9282)
TSE First Section, JPX-Nikkei 400 Member
Deeply committed to CSR and Sustainability
Japan’s first zero-carbon listed real estate company

Ichigo(TSE First Section 2337)

Ichigo Office (8975)

Ichigo Preserves andImproves Real Estate

Hiromi Miyake(Weightlifting)

The word “Ichigo” comes from theancient Japanese proverb, Ichigo
Ichie, literally meaning “Onelifetime, one encounter.” Thephrase was first used by a 16th
century master of the tea
ceremony, Sen no Rikyu. He
called upon his disciples to give
total focus and sincerity to eachact of the tea ceremony for every
guest, because that particular
moment will only exist once andmust be fully lived and realized.

Ichigo embraces the Ichigo Ichie philosophy of sincerity
and service, and works to build strong long-term
relationships to support the success of our clients,
shareholders, and all stakeholders.

AssetManagement

Ichigo Investment Advisors

Ichigo Hotel (3463)
Ichigo Green (9282)

Sustainable
Real Estate

Clean Energy

Ichigo Estate

Miyako City

Ichigo Owners

CentroIchigo Land Shinchiku

Storage Plus

Ichigo Real Estate Services
Fukuoka

Ichigo Animation

Ichigo Marché

Hakata Hotels

Ichigo ECO Energy© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

64

Sponsor/Asset Manager/REIT Relationship

Sponsor

Ichigo (TSE First Section 2337)
100% Subsidiary

Sponsor Support
Value-Add Capabilities

Asset Manager

Ichigo Investment Advisors

Financial Support(Asset Warehousing)

Asset Management

TSE-Listed
Investment
Corporations

Ichigo Office(8975)

 Specializes in mid-size offices

Ichigo Hotel(3463)

 Specializes in hotels

Ichigo Green(9282) Solar power YieldCo

 Focused on the Tokyo Metropolitan Area
 85 assets, JPY 203.2B (as of November 30, 2019) Listed in November 2015 22 hotels, JPY 50.8B (as of November 30, 2019) Listed in December 2016 15 solar plants, JPY 11.4B (as of November 30, 2019)© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

65

Share Price (November 1, 2011 to October 31, 2019)
Trading Volume

Ichigo Office

TSE REIT Index(JPY)(Shares Traded)

150,000

50,000Post-Merger High (closing): JPY 118,100 (Oct 10, 2019)
Post-Merger Low (closing): JPY 25,310 (Nov 22, 2011)
October 2019 Period Average Daily Volume: 4,998 shares* as of October 31, 2019

Public Offering
JPY 89,212
May 1, 2015

120,000

40,000Public Offering
JPY 83,167
Dec 3, 2014

90,00060,000Public Offering
JPY 79,365
May 23, 2016

Public Offering
JPY 62,595
May 27, 2013

30,000MergerJPY 33,500 (closing)Nov 1, 2011

20,00010,00030,0000Nov2011年
2011 Jan 2012 2012年 Jan 2013 2013年

0
Jan 20142014年

2015年
Jan 2015

2016年
Jan 2016

Jan 2017年
2017

2018年
Jan
2018

2019年
Jan
2019

Source: Bloomberg© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

66

Shareholder Composition
as of October 31, 2019

Major Shareholders

Shareholdings by Shareholder Type
Share

1

Ichigo Trust Pte. Ltd.

344,190

22.5%

2

The Master Trust Bank of Japan,
Trust Account244,211

15.9%

3

Japan Trustee Services Bank, Ltd.,
Trust Account209,434

13.7%

4

NOMURA BANK (LUXEMBOURG) S.A.

65,395

4.3%

5

Trust & Custody Service Bank, Ltd.,
Securities Investment Trust Account51,585

3.4%

6

Nomura Trust & Banking Co., Ltd.
Investment Trust Account48,963

3.2%

7

Morgan Stanley MUFG Securities Co., Ltd.

42,757

2.8%

8

GOLDMAN SACHS INTERNATIONAL

29,484

1.9%

9

JPMC GOLDMAN SACHS TRUST JASDEC
LENDING ACCOUNT

19,5301.3%

10 Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.

18,392

1.2%

1,073,941

70.1%

Total

Foreign Corporations & Individuals

Non-Financial Domestic Corporations

Domestic Financial Institutions

Domestic Individuals

714,073 shares(46.6%)

692,218 shares(45.2%)

14,342 shares(0.9%)

13,393 shares(0.9%)

632,161 shares(41.3%)

690,632 shares(45.1%)

715,785 shares(46.7%)

134,013 shares(8.7%)

113,240 shares(7.4%)

110,891 shares(7.2%)

Oct 2018(1,532,287 shares)

Apr 2019(1,532,287 shares) *Oct 2019(1,532,287 shares) *750,247 shares(49.0%)
15,866 shares(1.0%)*

No. ofSharesName* Number of Shares Outstanding

Shareholders by Shareholder Type

Domestic Individuals
Domestic Financial Institutions
City banks, trust banks
Regional banks
Other (including securities companies)
Non-Financial Domestic Corporations
Foreign Corporations & Individuals
Total© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

Oct 31, 2018
Shareholders
14,262
55
10
9
36
214
174
14,705

Oct 31, 2019
Apr 30, 2019
Shareholders Shareholders Share
12,652
12,443
96.8%
62
63
0.5%
10
10
0.1%
10
12
0.1%
42
41
0.3%
193
172
1.3%
184
180
1.4%
13,091
12,858100.0%

67

Ichigo Office Overview
Investment Corporation

as of October 31, 2019

Name

Ichigo Office REIT Investment Corporation

Securities Code8975

Address

1-1-1 Uchisaiwaicho, Chiyoda-ku, Tokyo

Executive Director

Yoshihiro Takatsuka

Portfolio Assets

85 Assets

Portfolio Value

JPY 203B (based on acquisition price)

Fiscal Periods (Semi-Annual)November – April; May – OctoberAsset Management Company
Name

Ichigo Investment Advisors Co., Ltd.

President

Hiroshi Iwai

Registration & Membership

Financial Instruments Dealer License (Investment Management Services,
Investment Advisory & Agency Services, and Type II Financial Instruments
Services): Minister of Finance, Kanto Financial Bureau #318

© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

68

MEMO

© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

69

MEMO

© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

70

Disclaimer
These materials are for informational purposes only, and do not constitute or form a part of, and should not be construed as, anoffer to sell or a solicitation of an offer to buy any securities of Ichigo Office REIT Investment Corporation (“Ichigo Office”).
These materials may contain forward-looking statements regarding the intent, belief or current expectations of management of
Ichigo Office with respect to financial condition and future results of operations. These statements are based on certain
assumptions founded on currently available information. Accordingly, such statements are subject to risks, uncertainties andassumptions and there is no assurance as to actual financial conditions or results of operations. Actual results may vary fromthose indicated in the forward-looking statements. Accordingly, please refrain from solely relying on these statements.
These materials have been created by the management of Ichigo Office and Ichigo Investment Advisors Co., Ltd. (IIA) with thebelief that the information contained is accurate. However, there is no assurance given as to the accuracy, certainty, validity or
fairness of any such information. Please note that the content of these materials is subject to revision or retraction without priornotice.
This document is a translation. If there is any discrepancy between the Japanese version and the English translation, theJapanese version shall prevail. No copying or reproduction of these materials or part of these materials is allowed withoutobtaining prior consent from Ichigo Office and IIA.

Make The World
More Sustainable

Ichigo Office IR Desk (8975)
TEL：+81-3-3502-4891
E-mail: IR_Office@ichigo.gr.jp
www.ichigo-office.co.jp/english
Ichigo is Japan’s first zero-carbon listed real estate company. We are taking
responsibility for our environmental footprint by offsetting our carbon emissions
and investing in low-carbon technologies such as solar energy.

© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

71